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The ACO proposed rules: A party starter or a party killer?

We all anxiously, and many hopefully, waited and watched as the CMS proposed rules for the accountable care organizations (ACO) were being prepared. Now that the rules have been released and many have had a chance to read them, what I’m hearing from hospitalists and administrators alike is a collective state of disappointment.

Some common observations that surround the ACO new rules: too much regulation, not enough potential or risk sharing and too much investment involved. The general feeling among those I’ve been talking to is that there will be muted participation in the ACO program because of all the barriers to entry.

For example, there are 65 quality measures that all must be met to qualify for any shared savings. How many practices can accurately collect and report data on even just a few Physician Quality Reporting Initiative (PQRI) metric? Another challenge is that 50% of providers in an ACO must meet the meaningful use definition for electronic health records. This represents a very large investment by physician practices regardless of size, many of which are not prepared to take on this burden. In addition, the rules call for a 25% holdback on funds earned in the shared savings program. This withhold is to protect against underperformance in future years when a repayment might be required of the ACO. However, as currently written, the withhold is never released! A successful ACO could accumulate several years of shared savings that they will never receive.

These are just a few of the elements of the proposed ACO rules that are taking the wind out of the sails of some in hospital medicine. It seems that the rules have not energized or empowered the potential participant organizations to embark on the effort to create ACOs. Instead, they seem to create barriers and skepticism. I am certain that large health systems that have already made most of the required investment in EHR, etc., will proceed with their plans, but I wonder how many smaller systems will view the return as being worth the risk and take the plunge.

What to do you think? What have you heard? Have the proposed rules put a damper on the ACO party? I am eager to hear from others on this topic.